Managing Your Fleet

How SMEs can reduce the rising costs of running a fleet

6 min read

05 April 2018

The current economic climate demands that SMEs have the strategies, tools and insights to better manage costs, particularly when it comes to fleet operations, writes Fleetcor's Thore Vestergaard.

Cost saving is at the heart of all successful enterprises regardless of sector. However, it’s a strategic pillar that is gaining increasing focus for SMEs, particularly those based here in the UK.

A recent economic report from CYBG, the owner of Clydesdale and Yorkshire Banks, details some of the pressures that UK SMEs currently face, with rising costs and slowing revenues being the two main drivers. These economic pressures are heightened for businesses that rely on a fleet of vehicles to carry out fundamental operations.

The first half of 2017 alone saw the total vehicle operating costs for fleet vehicles – defined as anything from cars up to 44-tone articulated lorries – increase by 2.5 per cent. By far, the largest contributor to these costs was fuel, ranging from 18 per cent for 7.5 tonne vans to 32 per cent for the largest vehicles.

So, the question remains, what can SMEs do to reduce costs and protect their bottom line from further erosion when it comes to their reliance on fleet vehicles?

Using technology to spot fleet inefficiencies

Like in other sectors, technology, and particularly data, is paving the way when it comes to driving greater business efficiencies.

From mileage to the number and frequency of fuel stops and maintenance logs, the technology within some fleet vehicles offer operators a wealth of information that can help them take steps to improve fuel efficiency.

However, in order to do this, they must have access to comprehensive management information (MI) protocols and procedures in order to collect and analyse data effectively.

With this ability to analyse fleet data, SMEs can take back control of costs by working out which vehicles are inefficient when it comes to fuel and maintenance. What’s more, access to MI can be accessed via fuel card providers, of which Allstar Business Solutions is one.

Optimising through telematics

By harnessing telematics, businesses can gain access to a more intricate level of vehicle data. For instance, those responsible for fleet management can better understand what routes are being taken by drivers, how efficient their driving is in relation to fuel consumption, and how average speeds are impacting overall efficiencies.

This data gathering can prove useful in tailoring driver training programmes, which can be designed to improve driving techniques and behaviours across a company’s fleet vehicle users. What’s more, access to this type of insight is easy for SMEs to gain access to, as fuel card providers often provide this as part of their services.

Allstar Business Solutions even offers a business mileage monitor which allows organisations to view drivers’ full journey details, including actual pence per mile calculations, without the need for receipts.

Staying on top of maintenance

The way a vehicle is maintained can have an enormous impact on fuel efficiency. For instance, dirty engines use more fuel, while tyres that are worn or are at an incorrect pressure can negatively affect how quickly the car accelerates, resulting in the motor having to work harder.

Although seemingly innocuous, poor understanding and/or application of maintenance techniques can lead to huge cost implications, particularly with maintenance costs themselves also on an upward trajectory.

Unsurprisingly, having a frequent and well-oiled maintenance procedure in place will ensure your vehicles are running efficiently. Underpinning good maintenance procedures are the types of MI data talked about previously, helping to identify underperforming vehicles so that investigations and repairs can be carried out.

Fuel cards can play their part in minimising maintenance and repair costs for SMEs. For example, the hybrid Allstar Plus Visa card has seen my organisation team up with over 1,000 UK garages to provide a rebate scheme.

Opting for a fuel card solution

Making your fleet operations more efficient and less costly isn’t just about the tangible costs relating to SMR and fuel, it’s also about saving the most precious commodity we have – time.

This is a consideration my organisation has tried to capture in the products and services it provides – again, one of the most recent being the Allstar Plus Visa card.

The Allstar Plus Visa fuel card has been developed to give SMEs a combined fuel and expenses card which actively provides fleet managers with an HMRC-invoice on all fuel purchases made by company drivers, along with a consolidated statement for all other expenses which are accrued through the VISA network.

In keeping with our ‘beyond fuel’ maxim, the one card can also be used for costs incurred by all employees when travelling – whether they be for accommodation, subsistence or other ad hoc costs.

Having the ability to set limits on additional travel expenditure too, means that fleet managers with fuel cards can enact savings right across their organisation, and are not necessarily limited to those that are just vehicle-related.

Thore Vestergaard is the SVP and MD of Commercial Cards at FLEETCOR.